Ministry mulls recalling Steinmetz, Sagi licenses

Sources inform ''Globes'' that Teddy Sagi and Beny Steinmetz's companies have not yet submitted work plans for drilling their licenses.

In the wake of the disappointing results at the Ishai license, the Petroleum Supervisor is considering that the licensees, Israel Opportunity Energy Resources LP (TASE: ISOP.L) and companies owned by Beny Steinmetz and Teddy Sagi return most of their licenses.

Israel Opportunity owns 10% of the five Pelagic licenses, including Ishai, Benny Steinmetz's Nammax Oil and Gas Ltd. owns 42.5%, two companies owned by Teddy Sagi, Frendum Investments Ltd. and Daden Investment Ltd. own 33.5%, and 9%, respectively, and well operator AGR Petroleum Services Holdings AS of Norway owns 5%.

Sources inform ''Globes'' that the licensees have not yet submitted work plans to the Petroleum Supervisor for drilling at three of the five licenses. Nor have they submitted a contract with a drilling rig for the next well at the Yoad license, which borders Leviathan.

The preliminary findings confirm the "Globes" exposé that the amount of natural gas in the reservoir is much smaller than expected, and that it is doubtful whether it is worthwhile developing the reservoir. Sagi and Steinmetz invested an estimated $100 million in the Aphrodite 2 well at Ishai. Energy exploration industry sources say that the disappointing results may cause them to reevaluate making further investments in oil and gas exploration. This opinion is reinforced by the firing of most employees at Sagi's Genesis Energy (Israel) Ltd., which handles his Israeli energy exploration operations.

Genesis Energy said in response, "Genesis Energy owns rights to seven oil and gas exploration licenses. Following the completion of the well at the Ishai license and the sharp drop in activity until the next well in the licenses is carried out, the company reduced its workforce as planned. The professional team is continuing its work at the company, and will promote the work plan for the various licenses, including with regard to assessments and development of the Aphrodite structure, in which the company has a stake (along with its other partners in the Pelagic licenses), development of the other Pelagic licenses, which include part of the Leviathan structure, development of the Oz prospect, and more."

The Ministry of Energy and Water Resources said, "Under the Oil Law, all the rights holders must meet their work plans and the other conditions stipulated in the licenses awarded them."

Published by Globes [online], Israel business news - www.globes-online.com - on January 6, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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